MARKET OUTLOOK

AUGUST 2025

The Next Move: Lowering Federal Interest Rates

Our latest Market Outlook explores the implications of the Federal Reserve’s next potential move: lowering interest rates–and how this shift could reshape the U.S. economy, housing, and land investment.

Highlights:

• Fed Policy & Inflation: After two cuts in late 2024, the Fed has held rates steady at 4.25%-4.50% through mid-2025. Inflation is easing, and futures markets price in a high likelihood of cuts starting in September 2025 .

• Economic Outlook: GDP growth is slowing, consumer spending is rebounding, unemployment is steady near 4.2%, and recession risk has fallen to 28% from 50% last year .

• Housing Market: Lower mortgage rates (potentially falling to 5.75%-6.25% by mid-2026) could unlock affordability for millions of households and stimulate new construction .

• Builder Strategies: Homebuilders are cautiously optimistic, using “land-light” models while inventory remains undersupplied by 2-6 million units .

• Investor Sentiment: First-time buyers and institutional capital are expected to re-enter markets as affordability improves. Land values, historically resilient, may see strong appreciation in the next cycle .

• Walton Global’s Position: Our entitlement expertise, builder partnerships, and asset-light approach position us to capitalize on housing’s next expansion phase.